Euro swaps get another reprieve

CFTC’s Division of Market Oversight Provides Extension of Temporary No-Action Relief with respect to Swaps Trading on Multilateral Trading Facilities Overseen by Competent Authorities Designated by European Union Member States

Washington, DC — The Commodity Futures Trading Commission’s (CFTC or Commission) Division of Market Oversight (DMO) today announced the issuance of a no-action letter extending time-limited relief for (1) Multilateral Trading Facilities overseen by competent authorities designated by European Union Member States (MTFs) from the swap execution facility (SEF) registration requirement set out in section 5h(a)(1) of the Commodity Exchange Act (CEA or Act) and Commission regulation 37.3(a)(1); and (2) parties executing swap transactions on or pursuant to the rules of MTFs from the trade execution mandate set out in section 2(h)(8) of the Act.

DMO and the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) intend to issue in the near future a no-action letter providing conditional, long-term relief for MTFs that, upon publication by the Commission, will supersede CFTC No-Action Letter No. 14-16 (Replacement Long-Term No-Action Letter). The conditional relief that will be provided in the Replacement Long-Term No-Action Letter will generally track the conditional relief provided in CFTC No-Action Letter No. 14-16 in both substance and process, but will contain several notable clarifications and amended conditions for qualifying for such conditional relief.

DMO is providing this additional period of time to allow MTFs and parties executing swap transactions on or pursuant to the rules of MTFs to consider the clarifications and amended conditions that will be featured in the Replacement Long-Term No-Action Letter once it is published by the Commission.

This short-term no-action relief will expire for any particular MTF upon the earlier of: (1) DMO’s issuance of a letter acknowledging receipt of, and granting an MTF’s relief request pursuant to the Replacement Long-Term No-Action Letter or (2) 11:59 pm EDT on May 14, 2014.